UKHospitality backs 100,000 youth jobs as small venues face costs

UKHospitality and the Government have announced plans for 100,000 paid jobs for unemployed young people across the UK over three years, with Nando’s, McDonald’s and Wagamama among the employers backing the scheme.

The partnership, announced on 15 October, leaves unanswered how independent pubs, cafés and restaurants will participate. It comes as hospitality leaders attribute around 100,000 job losses over the past two years to increased payroll costs.

What happened

The commitment covers paid roles for people aged 18 to 24 who are not in education, employment or training, commonly described as NEET. Employers will also provide work experience and training alongside the jobs programme.

As reported by Startups.co.uk, the agreement sits within the Government’s wider Youth Guarantee. That programme covers a broader age group, aiming to give every 16-to-24-year-old a route into employment, education or training.

Merlin Entertainments has committed to 300 roles for young people over the next three years. Its contribution is one of the specific employer commitments identified in the announcement, which is otherwise built around participation by major hospitality businesses.

The Government also plans to increase support for the Hospitality Skills Passport. The industry scheme helps young people acquire the skills and qualifications needed to begin working in hospitality.

For smaller operators, the unresolved issue is how they enter the partnership, rather than whether any financial support exists. Separate hiring and apprenticeship payments are available to eligible independent employers, although those schemes carry their own conditions.

The background

Almost a million young people are classified as NEET. The Government says nearly six in 10 of that group have never held a job, making access to an initial paid role a substantial part of the employment challenge.

Hospitality already provides a significant share of that entry-level employment. UKHospitality says the sector accounts for 31% of first jobs among 16-to-24-year-olds and generates around 300,000 roles for young workers each year.

Independent venues must weigh recruitment against several recurring employment costs. Employer National Insurance and pension contributions sit alongside minimum wage increases each April, while business rates add a separate property-related expense.

Research by the Federation of Small Businesses found that 28% of small employers would recruit more people if the Small Business Rates Relief threshold increased. A further 26% said they would use the savings for pay or benefits, putting rates relief at the centre of a separate small-business hiring debate.

The pressure is not confined to recruitment incentives. The sector’s wider tax burden is also under scrutiny, with independent operators having to assess whether they can meet continuing costs after any initial hiring payment has been received.

What people are saying

Work and Pensions Secretary Pat McFadden has emphasised hospitality’s established role in helping young people enter employment. His position places the sector’s existing recruitment reach at the heart of the Government’s approach.

An interim review commissioned by the Government and led by Alan Milburn warned of the risk of a generation being left behind. The review adds to the case for intervention where young people have become disconnected from both employment and education.

For smaller hospitality businesses, industry leaders identify employment costs as the main obstacle to taking on staff. That concern is about the affordability of creating posts, rather than simply finding young people willing to fill them.

The Federation of Small Businesses wants the Small Business Rates Relief threshold increased to £25,000. UKHospitality is seeking a different change: an increase in the employer National Insurance threshold for hospitality to £10,000 ahead of the 28 October Budget.

Those requests seek reductions in ongoing operating costs rather than a payment attached to an individual recruit. UKHospitality’s employment-cost position also sits alongside its calls for licensing reform on the high street.

What happens next

The Budget on 28 October is the next identified policy milestone for the sector’s tax requests. The announcement does not establish whether either proposed threshold increase will be adopted, leaving venues without a confirmed change to factor into recruitment budgets.

Under the Youth Jobs Grant, employers of any size can receive up to £3,000 for an eligible job. The payment is made in two instalments and applies to hiring an 18-to-24-year-old who has received Universal Credit for at least six months.

That benefit requirement makes the grant narrower than the headline jobs pledge. A prospective employee’s age and NEET status alone do not establish eligibility for the payment; the Universal Credit condition must also be met.

A separate £2,000 payment for small and medium-sized employers taking on a new apprentice aged 16 to 24 launched in the month of the announcement. Eligible apprentices at employers that do not pay the apprenticeship levy can also receive fully funded training.

Employers do not pay employer National Insurance on apprentices under 25 up to a pay threshold. That relief addresses part of the continuing payroll bill, distinct from the initial apprenticeship payment and the funding of training.

The three-year delivery period now provides the timetable for participating employers to fulfil their commitments. For independent venues, the outstanding detail remains how to join the partnership and how their recruitment would contribute to its 100,000-job target.